Correlation Between Growth Strategy and Embark Commodity

Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Embark Commodity at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Growth Strategy and Embark Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Growth Strategy Fund and Embark Commodity Strategy, you can compare the effects of market volatilities on Growth Strategy and Embark Commodity and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Growth Strategy with a short position of Embark Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Embark Commodity.

Diversification Opportunities for Growth Strategy and Embark Commodity

0.2

Correlation Coefficient

Growth Strategy  Embark Commodity

Modest diversification

The 3 months correlation between Growth and Embark is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Embark Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Commodity Strategy and Growth Strategy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Growth Strategy Fund are associated (or correlated) with Embark Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Commodity Strategy has no effect on the direction of Growth Strategy i.e., Growth Strategy and Embark Commodity go up and down completely randomly.

Pair Corralation between Growth Strategy and Embark Commodity

Assuming the 90 days horizon Growth Strategy Fund is expected to generate 0.79 times more return on investment than Embark Commodity. However, Growth Strategy Fund is 1.26 times less risky than Embark Commodity. It trades about 0.19 of its potential returns per unit of risk. Embark Commodity Strategy is currently generating about 0.04 per unit of risk. If you would invest  1,282  in Growth Strategy Fund on May 16, 2025 and sell it today you would earn a total of  80.00  from holding Growth Strategy Fund or generate 6.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Growth Strategy Fund  vs.  Embark Commodity Strategy

Growth Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Strategy Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Growth Strategy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Embark Commodity Strategy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Embark Commodity Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Embark Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Growth Strategy and Embark Commodity

The main advantage of trading using opposite Growth Strategy and Embark Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Embark Commodity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Embark Commodity will offset losses from the drop in Embark Commodity's long position.

The idea behind Growth Strategy Fund and Embark Commodity Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.